So here we are at the beginning of the various banks profit reporting season. Are we all excited? Trembling with anticipation to hear about the obscene amounts of money the banks are skimming from their customers?

I am.

I like to see businesses making an honest profit. Businesses making a healthy profit generally means that the economy is healthy, that people are contented and that everybody is getting along with each other the way they should be.

Does that sound like the world we live in? Of course not.

Yesterday, Barclays (one of the banks I hold an account with) posted profits of about 7 BILLION pounds sterling for last year. HSBC (the bank I wish I didn't have an account at) is expected to post profits of over TWELVE BILLION pounds sterling next week.

In total, UK banks are expected to announce profits of over 40 billion pounds sterling within the next few weeks.

Lets put this into perspective. Australia committed $22 billion Australian to defence for the years 2006 - 07. That works out to be £8.9 billion pounds sterling. Barclays could almost pay for the defence of Australia from declared profits of a single year alone.

HSBC on the other hand could easily pay for Australia's defence, but given its self declared position as the world's local bank, I'm sure it would be happier paying for the defence of Latvia, Lithuania, Luxembourg, Portugal, Romania, Slovakia, Slovenia, Denmark, Hungary and Bulgaria instead. Which it could do, based on these figures here.

Barclays could bail the NHS out of its current £1.318 billion pound deficit almost five and a half times with this years declared profits; HSBC could do it more than nine times.

Now I'm not advocating that this is what should happen of course, I am simply using these figures for perspective.

This is where the difference between an honest profit and a dishonest profit comes in. If an honest profit means a healthy economy, what does a dishonest profit mean?

It means that some parties are benefiting to the detriment of other parties. That isn't capitalism or democracy, that's corruption and greed.

Strong words? I don't think so. Think about this: Penalty charges from the various UK banks are estimated to be worth around £4.7 billion this year. As a percentage, that is better than ten per cent of the total reported profits for all of the banks together.

That might not sound like much looked at in that light, but as the US defence department is wont to say, a hundred million here and a hundred million there, pretty soon you are talking about real money. You think Barclays would be happy to lose more than £700 million of this years profits? Maybe HSBC would be pleased to see the back of better than £1.2 billion?

Not likely.

You might ask why I'm get so cranky about this and the reason is very simple. These bank charges are unlawful. They have been unlawful for almost one hundred years, since the Dunlop Pneumatic Tyre Co, Ltd v New Garage and Motor Co, Ltd [1914-1915] All ER Rep 739 case, which held that penalty charges are irrecoverable at common law.

Basically that means that banks are only allowed to charge the actual liquidated cost of creating the unauthorised overdraft limit or whatever it is they are telling you the charge is about. Currently the Office of Fair Trading has set an estimate of £12 for each charge, however that is a pretty fiercely argued figure, since a BBC news show got a couple of ex bank managers to sit down and take everything into account while figuring out exactly how much it could cost to perform the tasks the banks are charging for.

Taking everything into account, from the cost of the electricity to run the computers, the price of the program on the computer, the time of the computer operators and the cost of setting up the infrastructure and an awful lot of other things as well, these two ex bank managers estimated the true cost to be between £2.50 and £4.50.

Currently the banks are charging between £20 and £35 for unauthorised overdrafts as small as one single pound.

Imagine this scenario: You go overdrawn by lets say two pounds, the bank hits you with a thirty pound unauthorised overdraft fee, making you £32 overdrawn. You don't fix the problem the next day, so they hit you again for another £30, making you £62 overdrawn. You only have two days till payday and you are pissed off about the bank doing this, but you figure you can fix it when your pay comes in.

Problem is, when your pay gets in, its not £62 less than you figured, its £92. Thats right, they hit you for it again on the third day.

All because you went £2 overdrawn.

Luckily, there are things you can do. www.penaltycharges.co.uk has a very large site devoted to helping people recover these charges from the banks. At last count, they had managed to help people reclaim £1,328,404.00 from the various banks and that figure is climbing daily. This site has been operating for free since its inception and is running almost entirely on two things. The first is something which warms my heart whenever I see it and that is people getting together to use reason and sense to solve problems. The second thing running the site (apart from the administrators of course) is donations from people who the site has helped.

You can claim charges from as far back as 6 years ago and to be honest, its well worth doing it. I found just over £700 from the last three years of my association with HSBC and the letter I sent them (with the guidence of the above site) has hopefully been warming the cockles of some HSBC administrators heart since yesterday.

Have a look at the site, you never know what you might find.